Morning Round-Up: Lloyd’s profits drop 30%, pound sees volatility, jobs gone at Credit Suisse

Lloyd’s of London sees pre-tax profit drop

The Lloyd’s of London insurance market reported results on Wednesday, seeing a 30 percent drop in pre-tax profit to £2.1 billion.

In a statement, Chairman John Nelson commented:

“In a market undeniably tougher than seen for many years, we have had to demonstrate our ability to adapt and take action. In these conditions, these results are creditable.”

Return on capital fell to 9.1 percent from 14.1 percent last year, with its combined ratio – a key measure of underwriting profitability – falling to 90 percent from 88.4 percent in 2014. Anything below 100 percent indicates a profit.

Pound falls against the dollar, volatility increases

The British Pound has sunk further against the US dollar this morning, down almost half a cent and extending losses that began yesterday.

Traders cite uncertainty over the EU referendum as the main reason for the drop, which falls three months today. After a slight recovery over the last few weeks, the Pound is now soaring back down to six-year lows seen in February.

The cost of insuring against a sharp fall in the pound also sky-rocketed this morning – another key sign of Brexit jitters.

Three-month sterling volatility has hit levels not seen since the last general election, showing that traders expect significant changes over the next quarter.

2,000 more job cuts at Credit Suisse

Swiss bank Credit Suisse has announced another 2,000 strong job cut in its global markets business, adding to the 4,000 cuts announced last month.

The bank are currently in the throes of a plan to reduce annual costs by 800m Swiss francs a year, but are struggling with their “high and inflexible cost base” and “volatile market conditions”.

Recently appointed chief executive Tidjane Thiam said the performance of global markets in general was “disappointing”, adding that “in this context, we have taken immediate action to reduce outsized positions in activities not consistent with our new strategy and systematically reduced our exposures”



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